Whether you’re passionate about cars or not, chances are you’ve imagined yourself owning an exotic car at some point in your life. After all, we’re sure that Aston Martin that you saw online would look significantly better in your garage, wouldnβt it? You may think that a $150,000 price tag makes it unattainable for you, but the truth is that most people don’t pay it all upfront; they finance it. For the most part, financing an exotic car is very similar to financing a regular car, but it does depend on a few key factors. Here is the Chicago Motor Cars checklist for financing an exotic car:
You have to have a very high credit score
Yes, it is possible to finance an exotic car with a lower credit score, but you’ll likely have to pay higher interest rates and put much more down. Most dealerships use Experian or Equifax rating systems when evaluating your ability to be approved for financing on the vehicle of your choice, and if you’re shy of making it into their “preferred” range (above 750), then they may not want to work with you. In many cases, a lower credit score may be acceptable, but be prepared to have at least 10-20% for a down payment if this is the case. At Chicago Motor Cars, our online credit approval process is very simple and will be able to tell you whether you qualify or not right away.
Your credit history is also important
It isn’t just your score that matters; it’s also the length of your credit history that will determine how much you can finance. If you have a low score but a long credit history, then it is possible to get approved for more than someone with a high score and no credit file at all. You probably don’t need to have everything paid off, but you’ll definitely need to be able to show that you’ve financed enough assets in the past to make yourself qualified for a large loan
It’s wise to have a very high credit score and a clean credit history when financing an expensive vehicle like this because it shows that your financial history is clean and without blemishes, which will make the lender more confident in their decision (and ultimately result in lower interest rates).
It’s great to have an established relationship with a dealership
This doesn’t mean that you’re obligated to buy your vehicle from the same dealer every time; it just means that if they know you and see how trustworthy of a customer you are, then there will be more incentive for them to work with you. They can connect financing options like leasing, loans, and gap insurance which can make the process a lot easier for you.
Know how much car you can afford
Knowing how much you can afford to pay for a car can be tough. Typically, the more you borrow for a car, then the higher your payments are going to be. So it’s important that you take into account how much money you’re currently making, how much it will cost to maintain it, and how much fixing it will cost if something were to happen. Keep in mind that premium gas, exotic car maintenance like detailing, oil changes, and luxury car auto repair are all much more expensive than those of a regular car.
Once you figure out how much you can afford to spend, you can view the Chicago Motor Cars online inventory of cars here.
Decide on your proper loan term
There are a few different options when it comes to deciding on whether you want a short-term or long-term financing plan. A short-term loan is going to have higher interest rates but makes more sense if your financial situation isn’t stable, and if the car will be paid off within three years’ time so that you don’t get stuck with a high monthly payment.
A long-term loan is going to have a lower interest rate, but it’s important that you’re absolutely confident that you can make those payments for the entire duration of the loan without any problems. That being said, you will also likely pay more in total interest over time with a long-term loan despite the lower interest rate.
Make sure you consider interest rates
This is arguably the most important part of financing your car because it can make or break whether you’re able to afford payments. Make sure that you take into account all potential fees and figure out exactly what kind of interest rate would be possible for you with a given dealership’s rates.
Loans can carry interest rates of anywhere between 1 and 10 percent. This can vary based on whether you use direct lending, which is through an auto manufacturer, or indirect lending through a bank.
When you receive your quote on the car you want to buy and see what kind of interest rate is possible for you, make sure that it’s something affordable enough without leaving too much room left over after paying back monthly payments. Any higher than this could potentially cause problems if unforeseen expenses pop up.
It’s important to know that it can take a few days for you to be able to see these rates and finalize the deal, so if there is one particular dealership or lender you like then make sure they have everything ready when you want them to!
It may seem like common sense, but don’t forget to do your homework before applying for a loan! Make sure you know what kind of rates are possible with the dealership’s finance company and make sure to ask any questions that come up when talking to them.
Yes, some dealerships offer 0% APR for the first few months
This is a great incentive for buyers, but it’s important to read the fine print. Oftentimes, 0% APR only applies to the loan amount that’s used to purchase the car; any money you borrow for accessories or taxes will have a higher interest rate. So make sure you ask about this before signing anything!
Even though financing luxury cars might seem like a daunting task at first, with some research and preparation you’ll be able to get a great deal on the car of your dreams. Now that weβve given you some tips, make sure to check out our inventory Chicago Motor Cars might have just what youβre looking for!
